Ring Fence

Posted in Finance, Accounting and Economics Terms, Total Reads: 1442

Definition: Ring Fence

Ring-fencing occurs when a percentage of a company's assets or profits are financially separated but are not always operated as a separate entity.

Ring-fencing might be done for one of the following reasons:

  • regulatory reasons
  • creating schemes for asset protection with respect to financing arrangements
  • segregating the separate revenue streams for taxation purposes

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